MONEY COLUMN - Recover first from husband’s death, plan later

Saturday

Sep 26, 2009 at 12:01 AMSep 26, 2009 at 12:52 PM

Dear Dave: My husband died four weeks ago. He was 52 years old and had a heart attack. We always lived on a budget and were careful with our money, so we were debt-free when he passed away. He had a 401(k) and an IRA worth about $500,000 along with $200,000 in life insurance. He always handled most of the money, so I don’t know what to do about all this.

— Nancy

DAVE RAMSEY

Dear Dave: My husband died four weeks ago. He was 52 years old and had a heart attack. We always lived on a budget and were careful with our money, so we were debt-free when he passed away. He had a 401(k) and an IRA worth about $500,000 along with $200,000 in life insurance. He always handled most of the money, so I don’t know what to do about all this.
— Nancy

Dear Nancy: I am so sorry you have to go through this. Fifty-two is way too young an age at which to leave this world. I’m sure the suddenness of it all has your head spinning, too. Right now, you need to take some time to absorb what’s happened. You’ve experienced a devastating loss, and you should never make major life decisions when you’re hurting or your emotions are out of whack.

For now, I want you to roll the 401(k) and IRA into IRAs in your name. Then, just let them sit there. I’d also park the insurance money in a Certificate of Deposit for about six months. Take out enough to live on, but leave the rest alone for a while. Give yourself some space and time to cry until your brain gets used to things and can plug back into everyday life again. Then, after some time has passed, you can start thinking about what you want to do in the years ahead. You can also educate yourself in finance and how to handle your money once your mind has had some time to readjust.

Don’t try to be super woman right now. I know you miss him a lot, but always remember that he loved you enough to make sure you’d be in great shape financially if something like this happened. God bless you, Nancy.

Dear Dave: What is the difference between NADA, Kelley Blue Book and Edmunds.com? Is one more accurate than the others, and how would you use them in negotiating the sale or purchase of a car?
— Anonymous

Dear Anonymous: NADA stands for National Automobile Dealers Association. A lot of their information is based on loan value, which basically is nothing more than what a banker wants to lend on a particular vehicle. Plus, it seems to me that overall NADA is oriented more toward the dealer than the consumer. KBB and Edmunds are both pretty fair in terms of real-world value, but you have to gather up pieces of information in order to get an accurate assessment.

I always look at the KBB private sale section when I buy or sell. Then, I’ll print out the information and use it during the negotiation. You could also shop other car sites online and find out what they’re asking for the same kind of vehicle. If you gather up several reference points of information you’ll begin to see a pattern evolve, and you’ll end up with a pretty good idea of fair market value.

Let’s say one site lists a car at $12,000, and another says $13,000. You could turn around and honestly tell a buyer that you’re offering a really good deal at $10,000. You could also toss out the high-end prices and the lowball numbers to come up with a good middle-ground figure that’s fair to both parties!